3/13/2017

1

ETHICAL ISSUES

AND PRACTICAL

SOLUTIONS

Professor Roberta K Flowers

Sheila Moragas, Milling Benson Woodward L.L.P

Goals of the Sessions

Identify the unique ethical question an attorney faces in a special needs trust practice.

Explore the rules and standards that impact on these issues.

Interactive discussion of the practical solutions

Have Fun.

3/13/2017

2

What is your favorite musical

artist?

A. Eminem

B. Taylor Swift

C. Lady GAGA

D. Johnny Cash (when

he was alive that

is)

E. You call these

people artists?Em

inem

Tayl

or Sw

ift

Lady G

AGA

Johnny C

ash (w

hen he w

as ..

.

You call

these

peo

ple ar

tists

?

20% 20%20%20%20%

Resources

ABA Model Rules of Professional Conduct

NAELA – Aspirational Standards for the Practice of Elder Law

www.naela.org/Applications/News-app/Files/112105final.pdf

ACTEC Commentaries on MRPC

www.actec.org/private/freeform/page.asp?PageID=489

The Questions Are Simple --

The Answers are Complicated

Who is the client?

Is there a conflict of interest in my involvement?

Who can I take to?

Can I play more than one role?

Even if I can ethically can do it, should I do it?

3/13/2017

3

Video-

Can I do it?

Attorney’s drafted the trust.

Bank/Trustee

See where the problem is

When the attorney drafted

the trust who was the client?

A. PI lawyer

B. The beneficiary

C. The trustee

D. No one the attorney was just acting as a consultant

E. Are the questions going to get easier

PI law

yer

The

benefic

iary

The

trust

ee

No one th

e atto

rney

was

ju..

Are th

e quest

ions g

oing t

o ...

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Who is the Client?

Retained by the litigation attorney

Retained by the trustee

Retained by the parents of the beneficiary

Retained by the beneficiary

Retained by the guardian

Retained as part of estate planning

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4

The importance of

Identifying your client

Malpractice

Confidentiality/Client/Attorney Privilege

Communications

Conflicts of Interest

Duty of Loyalty

Restrictions when dealing with non-clients

How do we identify the

client?

Model Rules/Preamble

Principles of substantive law external to these Rules

determine whether a client-lawyer relationship exists.

Most of the duties attach only after the client has

requested the lawyer to render legal services and the

lawyer has agreed to do so.

Confidentiality under Rule 1.6, that attach when the

lawyer agrees to consider whether a client-lawyer

relationship shall be established.

Whether a client-lawyer relationship exists for any specific

purpose can depend on the circumstances and may be a

question of fact.

NAELA Aspirational Standards

Understands and identifies whose

interest are being addressed

Clarifies who the attorney owes a

duty to

Clarifies steps that can be taken

Arranges for a private, direct and

personal communication with the

client

3/13/2017

5

How do we identify the

client?

Who called for the appointment?

Who came to the meeting?

Who is paying the bill?

Whose interests are being protected?

Who is signing the documents?

Can you accept a referral

fee?

A. Yes, it happens all

the time

B. No, it is unethical

C. Depends

Yes, i

t hap

pens a

ll the ti

me

No, it i

s uneth

ical

Depends

33%33%33%

Referral Fee

Model Rule 7.2

A lawyer shall not give anything of value

to a person for recommending the

lawyer's services except that a lawyer

may:

Pay Advertising costs

Pay Qualified Lawyer service

Buy a practice

Engage in a Referral agreement

.

3/13/2017

6

Fee Splitting

Model Rule 1.5 (e) A division of a fee between lawyers who

are not in the same firm may be made only if:

(1) the division is in proportion to the services

performed by each lawyer or each lawyer assumes joint

responsibility for the representation;

(2) the client agrees to the arrangement, including the

share each lawyer will receive, and the agreement is

confirmed in writing; and

(3) the total fee is reasonable

Is the “sweet” referral

agreement with the PI lawyer

ethical?

A. Yes, if there is a written agreement

B. Yes, if the clients know about the agreement

C. No, because it is exclusive

D. No, because referral agreements are per se unethical

Yes, i

f there

is a

writ

ten a

...

Yes, i

f the cl

ients

know

abo..

No, beca

use it

is e

xclu

sive

No, beca

use re

ferr

al a

gre...

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Model Rule 7.1

(4) refer clients to another lawyer or a nonlawyer professional pursuant to an agreement not otherwise prohibited under these Rules that provides for the other person to refer clients or customers to the lawyer, if

(i) the reciprocal referral agreement is not exclusive, and

(ii) the client is informed of the existence and nature of the agreement.

3/13/2017

7

Can the Attorney represent

the Trustee?

A. Yes

B. No

C. MAYBE

Yes No

MAYBE

33%33%33%

IS There a Conflict of

Interest?

1.7 Concurrent Client Conflicts

1.8 Attorney Personal Conflicts

1.9 Former Client Conflicts

1.18 Protection for the Prospective Client

How To Look at Conflicts

Comment 2 to Rule 1.7

Clearly identify the client or clients and the nature of

the relationship;

Determine whether a conflict of interest exists;

Decide whether the representation may be undertaken

despite the existence of a conflict=whether the conflict

is consentable; and

Consult with the clients affected under paragraph (a)

and obtain their informed consent, confirmed in

writing.

3/13/2017

8

Is there a Conflict

Rule 1.7

Directly Adverse

Materially Limiting

Rule 1.9

Materially Adverse

Same or Substantially the Same

Rule 1.18

Materially Adverse

Disqualifying Information

Is it Consentable

Reasonable attorney believe provide competent and

effective representation

Not against the law

Not in the same litigation representing both sides

Obtaining Consent

Informed Consent

Alternatives

Risks

Advantages

Confirmed in Writing

3/13/2017

9

Video-

Everyone is yelling at me

Attorney drafted the trust/identified client as the

beneficiary of the trust?

Who should the attorney talk to?

Who is the client?

A. Roger, the injured

beneficiary

B. Roger’s brother

C. Both

D. Neither, disbarred

attorneys cannot

have clients.

Roger,

the in

jure

d benef

iciar

y

Roger’s

bro

ther

Both

Neith

er, d

isbar

red a

ttorn

ey...

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The Accidental Client

Perspective of the client

Reasonable person would believe that an

attorney/client relationship has been formed

Who does the attorney think is the client

Who does the client think is the client

Who does the brother think is the client

3/13/2017

10

Can the Attorney talk to the

trustee

A. Yes, as he would be implied authorized to talk to the trustee.

B. No, it would be a breach of confidentiality.

C. Yes, if the client said it was okay.

D. No, it might confuse the trustee as to who the attorney represents.

Yes, a

s he

would

be im

plied...

No, it w

ould b

e a b

reach

of..

.

Yes, i

f the cl

ient s

aid it

was

...

No, it m

ight c

onfuse

the tr

...

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Rule 1.6

(a) A lawyer shall not reveal

information relating to the

representation of a client unless the

client gives informed consent, the

disclosure is impliedly authorized in

order to carry out the representation

or the disclosure is permitted by

paragraph (b).

Can the Attorney redraft the

trust and name himself as the

trustee

A. Yes, that is what the client wants

B. Yes, if he satisfies the requirements of entering into business with a client under Rule 1.8(a)

C. No, attorneys should not act as trustees

D. No, attorneys cannot draft the document that makes them a trustee

E. No, there is a conflict of interest

Yes, t

hat is

what t

he clie

nt...

Yes, i

f he sa

tisfie

s the

req...

No, atto

rney

s should

not a

c...

No, atto

rney

s can

not dra

ft t..

No, ther

e is a

confli

ct o

f int..

.

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3/13/2017

11

Ethical Issues

Competence

Conflict

Independent Judgment

Complying with rules about

entering into a business

transaction with a client

Rule 1.8(a)

(a) A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:

(1) the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;

(2) the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and

(3) the client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer's role in the transaction, including whether the lawyer is representing the client in the transaction.

Can I? Should I?

Do I have time?

Do I have desire?

Do I like the client?

Do I trust the client?

“Some Things Just Ain’t Right”

3/13/2017

12

Questions?